Unemployment rates fall in 39 states last month

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Job seekers sign in before meeting prospective employers during a career fair at a hotel in Dallas.

WASHINGTON (AP) — Unemployment rates fell in four-fifths of US states in December and rose in just two, though most of the improvement stemmed from unemployed Americans giving up on their job searches.

The Labor Department said on Tuesday that employers in 30 states added jobs, the fewest to report gains since August. Nineteen states reported job losses.

Nationwide, employers added just 74,000 jobs last month, the fewest in three years and much lower than the average of 214,000 in the previous four months. Economists attributed some of the slowdown to cold weather.

The national unemployment rate fell to 6.7 percent, the lowest in more than five years. But the decline occurred mostly because more people stopped looking for work. The government only counts people as unemployed if they are actively searching for jobs.

Several states saw their unemployment rates fall sharply. Yet most of the drops occurred because more job-seekers gave up. New Jersey's unemployment rate fell to 7.3 percent from 7.8 percent in November.

But the state also said that employers cut 36,300 jobs in December. The unemployment rate fell because about 26,000 of those out of work stopped looking.

North Carolina's unemployment rate fell to 6.9 percent from 7.4 percent. Many economists are closely watching the state's job market because last July it sharply cut back on the length of its unemployment benefits, to about 20 weeks from 74. Since then, its jobless rate has dropped nearly 2 percentage points.

But much of the gain occurred because of workforce drop-outs. About 110,000 people have stopped looking in the past year. Unemployment benefit recipients are required to look for jobs to receive aid. Once they exhaust their benefits, many beneficiaries stop searching.

Still, some former recipients have likely found jobs. Employers in North Carolina added 11,100 jobs in December and nearly 65,000 in the past year.

Rhode Island reported the highest unemployment rate in the nation, at 9.1 percent. It has displaced Nevada, which had the highest rate for several years, but is now second at 8.8 percent, followed by Illinois, at 8.6 percent.

North Dakota has the lowest rate, at 2.6 percent. The state is benefiting from an oil and gas drilling boom.